Underdog Launches CFTC Regulated Prediction Market
Mike Goodpaster Published 21/07/2026
Daily fantasy sports pioneer Underdog is the latest company to go full bore into the ultra-competitive and rapidly expanding prediction market industry. Underdog announced the launch of its own federally licensed prediction market exchange. The new prediction market exchange is wholly owned and operated by Underdog and licensed by the Commodity Futures Trading Commission (CFTC),
Underdog was the first sports gaming operator to offer access to sports prediction markets in its app last fall, operating as an intermediary partner to other prediction market exchanges. Before the launch of its own exchange, Underdog offered access to prediction markets through other exchanges, including Crypto.com and Kalshi.
Underdog is ready to go at it on their own
By opening a wholly owned and operated prediction market site, Underdog is breaking new ground in the US marketplace. As mentioned above, Underdog was the first sports gaming operator in the US market to make the move into the sports prediction market business. The company did so on its app last fall.
In March 2026, the company acquired a Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO). Underdog is also a registered Futures Commission Merchant (FCM), making it the first sports company with the complete prediction market license stack.
“We started this company with a clear belief – there is so much more to be built for sports fans in America," Jeremy Levine, CEO and co-founder of Underdog, said in a statement. "Despite incredible changes in the U.S. market in recent years, through the twisting journey from fantasy sports to regulated sports betting to prediction markets, we still see an industry that far too often simply misses in serving sports fans.
“Now with our own exchange, we’re going to unlock so much for more sports fans."
Underdog is taking a measured approach as it flies solo
The majority of prediction markets in the USA are seeking to operate in all 50 states. As a federally regulated entity, they feel they have the right to do so. State gaming officials are begging to differ, and that's leading to several court cases over the issue of prediction market sports event contracts.
As for Underdog, the company is taking its go-it-alone prediction market site launch with an air of caution behind it. At the moment, they are only live in 38 states. Underdog is avoiding many of the states involved in litigation with the prediction market sites and the CFTC. At issue is whether sports-event contracts are unlicensed sports betting.
The states the company is avoiding include Arizona, Colorado, Kentucky, Maryland, Massachusetts, Michigan, Mississippi, Nevada, New Jersey, Ohio, Pennsylvania, and Tennessee.
Underdog's slow rollout could be due to the limited prediction markets being offered on the site. Currently, Underdog is only providing sports-event contracts. It is offering prediction markets on sports, esports, and what it calls mind sports, which is basically chess.
"Prediction markets are largely about sports, and Underdog is the best at sports,” Levine said.
The company basically bought its way into the prediction market industry
Underdog may be slow-rolling its way toward becoming a standalone prediction market operation, but its entry into the game was bought and paid for.
In March 2026, Underdog purchased Aristotle Exchange DCM, Inc. (UDX) and Aristotle Exchange DCO. This acquisition granted Underdog Designated Contract Market and Derivatives Clearing Organization status under the Commodity Futures Trading Commission (CFTC). It would have taken the company several months to build its own prediction market platform. Then it would have needed to pursue a CFTC license.
Since September 2025, Underdog has handled almost $6.5 billion in notional prediction market volume. That ranks the company third among U.S. operators.